by Investing.com Staff, Investing.com
U.S. stocks fell on Friday as mixed data prompted investors to avoid equities after a week of volatile sessions marked by uncertainty over the fate of Federal Reserve stimulus measures. At the close of U.S. trading, the Dow Jones Industrial Average finished down 0.70%, the S&P 500 index ended down 0.59% as well, while the Nasdaq Composite index fell 0.63%.
A Bank of Japan decision earlier this week to leave monetary policy unchanged after months of rolling out stimulus measures has roiled markets in the past few days largely by fanning uncertainties as to whether the Federal Reserve will follow suit and scale backs stimulus measures.
Stimulus measures such as the Fed’s monthly USD85 billion bond-buying program send stock prices rising by design to spur recovery, though talk of their dismantling has frayed nerves in recent sessions, sending stocks through peaks and valleys.
Mixed data released on Friday prompted investors to avoid equities until the Federal Reserve provides some indications as to when stimulus measures may begin to unwind.
The U.S. Bureau of Labor Statistics reported earlier that the U.S. producer price index rose 0.5% in May, beating expectations for a 0.1% rise after a 0.7% decline the previous month.
The core producer price index, which is stripped of the more volatile food and energy costs, rose 0.1% last month, in line with expectations, after a 0.1% gain in April.
However, the Federal Reserve reported earlier industrial production in the U.S. came in flat in May, missing expectations for a 0.2% rise though up from a 0.4% contraction the previous month.
Weaker-than-expected consumer sentiment data pushed stocks lower as well.
Thomson Reuters/University of Michigan’s preliminary consumer sentiment index fell to 82.7 in June from 84.5 in May.
Analysts were expecting the reading to remain unchanged at 84.5.
Leading Dow Jones Industrial Average performers included Verizon Communications, up 0.87%, Merck, up 0.10%, and Home Depot, up 0.07%.
The Dow Jones Industrial Average’s worst performers included American Express, down 2.98%, DuPont, down 2.25%, and JPMorgan Chase, down 1.94%.
European indices, meanwhile, finished higher.
After the close of European trade, the EURO STOXX 50 rose 0.21%, France’s CAC 40 rose 0.19%, while Germany’s DAX 30 finished up 0.40%. Meanwhile, in the U.K. the FTSE 100 finished up 0.06%.
The Federal Reserve will begin a two-day monetary policy meeting on Tuesday followed by a decision on interest rates and a press conference with Chairman Ben Bernanke on Wednesday.
Markets will be eager to see if the U.S. monetary authority will clarify policy uncertainty.
The dollar traded mixed to lower against most major currencies on Friday after soft consumer sentiment data added to already growing uncertainty as to when the Federal Reserve will begin to scale back stimulus measures.
The release of the Bank of Japan’s minutes from its May monetary policy meeting suggested stimulus programs in Japan may face an exit strategy, which strengthened the yen against the dollar, though better-than-expected wholesale pricing data in the U.S. gave the greenback some support.
In U.S. trading on Friday, EUR/USD was down 0.21% at 1.3346. In the eurozone, official data revealed that the consumer price index remained unchanged in May at an annualized rate of 1.4%, in line with expectations.
Core consumer price inflation in the single currency bloc, which is stripped of food, energy, alcohol and tobacco items, rose to an annualized rate of 1.2% last month from 1% the previous month, in line with expectations.
The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.10% at 1.5705.
The yen strengthened against the dollar after BoJ policymakers said the bank should specify a 2-year limit for its monetary easing to help quell bond-market volatility, according to the minutes of the BoJ’s May 21-22 meeting.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.06% at 80.84.
Gold prices rose in choppy trading on Friday after investors viewed the commodity as oversold after uncertainty over whether or not the Federal Reserve will scale back monetary stimulus measures sent prices plummeting in recent sessions.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery were up 0.82% at USD1,389.05 a troy ounce in U.S. trading on Friday, up from a session low of USD1,377.85 and down from a high of USD1,391.65 a troy ounce.
Gold futures were likely to test support USD1,366.25 a troy ounce, Tuesday’s low, and resistance at USD1,423.25, Thursday’s high.
Gold prices fell on Thursday amid uncertainty over the fate of Federal Reserve stimulus measures, which tend to make gold an attractive hedge.
By Friday, investors viewed the commodity as oversold though mixed data allowed for choppy trading.
Elsewhere on the Comex, silver for July delivery was up 2.22% at USD22.063 a troy ounce, while copper for July delivery was up 0.15% and trading at USD3.190 a pound.
Crude prices rose in U.S. trading on Friday after the U.S. said it would send weapons to Syrian opposition forces, which fanned concerns unrest may escalate in the oil-rich region and threaten supply.
On the New York Mercantile Exchange, light sweet crude futures for delivery in July traded up 1.02% at USD97.68 a barrel on Friday, off from a session high of USD98.25 and up from an earlier session low of USD96.43.
Reports that the U.S. will arm Syrian rebels in wake of allegations that government forces have used chemical weapons during the internal conflict sent oil prices gaining on Friday.
Both Syria and its ally Russia strongly denied the accusations, and concerns that Syria’s conflict may escalate eclipsed spotty data out of the U.S.
Investors chose to focus on geopolitical concerns over soft output and consumer sentment figures.
On the ICE Futures Exchange, Brent oil futures for August delivery were up 0.75% at USD105.74 a barrel, up USD8.06 from its U.S. counterpart.
Natural gas prices fell on Friday after investors locked in gains from Thursday’s rally and sold the commodity for profits.
Prices shot up on Thursday after official U.S. data revealed stockpiles rose less than markets were expecting.
In the New York Mercantile Exchange, natural gas futures for delivery in July traded at USD3.763 per million British thermal units, down 1.35%.
The commodity hit a session low of USD3.754 and a high of USD3.832.
The U.S. Energy Information Administration said in its weekly report on Thursday that natural gas storage in the U.S. in the week ended June 7 rose by 95 billion cubic feet, below market expectations for an increase of 96 billion.
Inventories rose by 66 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a rise of 84 billion cubic feet.
Total U.S. natural gas storage stood at 2.347 trillion cubic feet as of last week. Stocks were 587 billion cubic feet less than last year at this time and 58 billion cubic feet below the five-year average of 2.405 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 102 billion cubic feet below the five-year average, following net injections of 57 billion cubic feet.
Stocks in the Producing Region were 2 billion cubic feet below the five-year average of 915 billion cubic feet after a net injection of 25 billion cubic feet.
The data sent prices gaining to levels ripe for profit taking on Friday, as did forecasts for temperatures to rise to above-normal levels for late June.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in July were up 1.08% and trading at USD97.73 a barrel, while heating oil futures for July delivery were up 0.93% at USD2.9667 per gallon.